In an extraordinary development, the presiding officer of the Securities Appellate Tribunal, Justice Kumar Rajaratnam, has excused himself from the UBS Securities Asia case.
This was in reaction to the Sebi counsel going on record in the press, before informing the court, about its decision not to consider plea bargaining for UBS as suggested by the presiding officer.
"An impression is sought to be created by Sebi that any suggestion made by the court for an amicable settlement between parties will not be acceptable to Sebi. Sebi undertook to report on Monday the outcome of their deliberation with respect to the settlement.
"In the meantime, a statement is purportedly made by Sebi to the press without first informing the court about the outcome of the deliberation by Sebi, that no settlement was possible. Since the suggestion came from me, it will not be appropriate for me to hear the matter and I excuse myself from the case," Justice Kumar Rajaratnam said in an office note.
When the case comes up again on Monday, it will be heard by the two other SAT members C Bhattacharya, a former managing director of the State Bank of India, and R N Bharadwaj, a former chairman of the Life Insurance Corporation.
SAT had suggested during the course of the hearing on Monday that Sebi could consider giving an opportunity to UBS Securities Asia in the form of a "plea bargaining" and impose a levy of up to Rs 50 crore (Rs 500 million) in lieu of further proceedings.
Sebi counsel Rohit Kapadia, however, said, "I have discussed the issue with my client (Sebi) and we are not interested in the suggestion made by SAT with respect to plea bargaining and would like the case to continue under 11(B) of Sebi Act, 1992."
Sebi had banned UBS Securities Asia from further issuing of participatory notes (PNs are overseas derivative instruments) for one year for alleged non-compliance with certain regulatory requirements.
The presiding officer of the tribunal Justice Rajaratnam said the Sebi could consider the option of plea bargaining to the allegedly errant FII. As UBS went on appeal, the case is now being heard by SAT.
